Google Beats the Street - NBC New York

Google Beats the Street

Earnings top expectations but after hour trading still drops



    Google Beats the Street
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    Does Google CEO Eric Schmidt even know that his jalopy of a website stopped working for just enough minutes to terrify Sommer Mathis?

    Google's second-quarter profit rose 19 percent despite the slowest revenue growth since the Internet search leader went public five years ago.

    The results released Thursday show the 19-month-old recession is still weighing on Google and the online ad market that generates virtually all of its revenue.

    Google earned $1.48 billion, or $4.66 per share, during the three months that ended in June. That compared with income of $1.25 billion, or $3.92 per share, for the same period last year.

    Revenue rose just 3 percent to $5.52 billion. Until this year, Google had never experienced single-digit sales growth.

    If not for stock compensation expenses, Google said it would have made $5.36 per share. That topped the average analyst estimate of $5.09 per share.

    CNBC Silicon Valley Bureau Chief Jim Goldman calls the Google numbers a Wall Street beat. 

    "Dig a little deeper into the Google report and you'll find that the company beat on just about every major metric: Non-GAAP operating income hit $2.17 billion versus the $2.1 billion expected; Google's Sites Revenue jumped to $1.68 billion versus the $1.59 billion expected; paid click growth increased 15 percent versus the 13 percent expected. Google also increased its cash position to $19.3 billion, up from the $17.8 billion last quarter," Goldman wrote in his blog.

    Goldman also points ou that Google cut its workforce by another 378 people in the past quarter.

    IBM also had a great earnings release after the closing bell.

    IBM dramatically increased its full-year profit forecast to $9.70 per share.

    The forecast had been $9.20 per share before Thursday.

    The upgrade is a rare sign of confidence from a major corporation in the recession. IBM believes it can continue wringing out more profit from its services and software divisions, even as sales suffer.

    The technology company said it had a second-quarter profit of $3.1 billion, or $2.32 per share. That was up 12 percent over last year and well ahead of analysts' projections for $2.02 per share.

    Sales fell 13 percent to $23.25 billion. Analysts expected $23.59 billion.